BUSINESS COVER
Business owners commonly neglect the financial effect that may follow the death or disability of an owner, partner or key person in the business. Understanding that each business is unique in terms of its structure and financial position, there are important aspects to evaluate and to determine whether they are relevant
Establish the financial impact should any debts, loans or facilities be called up in the event of a death or disability to a stakeholder in the business and how this would affect the immediate cash flow and potential for the business to continue.
- Ask – what lump sum amount must be provided for?
If there are 2 or more partners in the business, what would happen with the shares held by the deceased partner?
- Ask – do the other partners have adequate funds to purchase the share involved?
- Ask – is there a guaranteed market ready to buy the relevant share in the business?
- Ask – are the partners willing to accept the spouse or children of the deceased or disabled partner to become involved in the business?
Is there any particular owner or employee so instrumental to the financial wellbeing of the business?
- Ask – what are the financial consequences involved?
- Ask – What would the cost be of sourcing and replacing that specific person?
